<\/p>\n
The Chinese Communist Party (CCP) may be intercepting communications from undersea cables, placing at risk all phone and internet data passing through major networks in the Asia-Pacific region.<\/p>\n
Existing research shows that Chinese military branches associated with cyberespionage maintain operations near key cable landing stations. A leaked report citing intelligence sources in the United States, Japan, and Australia\u2014provided to The Epoch Times\u2014shows additional research on possible Chinese front companies with mysterious finances and questionable ties at key data chokepoints.<\/p>\n
It states that while China has a \u201cwell-deserved reputation for sophisticated cyber espionage,\u201d its attempts to tap into undersea cables carrying large amounts of data are often overlooked. It details an alleged operation in the Pacific, centering on the Marshall Islands and Nauru.<\/p>\n
\u201cThis would\u2014with surprising ease\u2014allow China access to all telephone and fax transmissions between South Korea, Japan, Australia, the Philippines, Singapore and U.S. bases all over the Pacific,\u201d it states. \u201cThis would provide China with access to critical military, economic and financial communications.\u201d<\/p>\n
The report demonstrates that multiple Chinese front companies may be involved.<\/p>\n
According to Agostino von Hassell, a retired intelligence officer and president of the consulting firm The Repton Group, who is familiar with the research, \u201cThe key impact is that this is an additional avenue of Chinese espionage, using almost old fashioned technology just like the Russians did when they were trying to tap into underwater sonar cables.\u201d<\/p>\n
Hassell said that while there is concern among intelligence agencies that Chinese front companies are stealing data from the undersea cables, it\u2019s very difficult to detect this form of espionage since \u201cit doesn\u2019t leave a trace.\u201d<\/p>\n
He added that this case is of particular concern, however, since a Chinese front company presence near cable landings in the Marshall Islands would give them access to all data transferred between countries in the region including Korea, Japan, Guam, and Australia.<\/p>\n
This is not only a threat to privacy, Hassell said, but also to military communications, banking transactions, and political circles.<\/p>\n
<\/p>\n
A key focus in the report is on a company called Acclinks, which it notes \u201cis most likely controlled by Beijing.\u201d Despite having no visible source of revenue, the company has more than $28 million on deposit in bank accounts spanning Australia, Marshall Islands, and Taiwan.<\/p>\n
According to Casey Fleming, CEO of BLACKOPS Partners, which advises senior leadership on national security in some of the world\u2019s largest organizations, it\u2019s not uncommon for the CCP to use front companies for espionage.<\/p>\n
\u201cThis is one of literally hundreds of methods of espionage,\u201d he said. \u201cThese are wartime methodologies which are assymetrical, and are replacing the conventional warfare that we\u2019re all familiar with.\u201d<\/p>\n
\u201cEspionage yields intelligence,\u201d he said, \u201cand intelligence wins wars.\u201d<\/p>\n
Acclinks has a \u201cdistribution\u201d center on the Marshall Islands which has not shown any activity for three years, yet, as the report states, is stationed at \u201cthe perfect place to access key submarine cables.\u201d<\/p>\n
Hassel said, \u201cThey have no known revenue. There is no known parent company.\u201d<\/p>\n
\u201cFor them, when they setup their operations on the Marshall Islands they had to put down $3 million, and it took two years before they could even come up with that money,\u201d he said.<\/p>\n
Another location of the company in Nauru again has no evident commercial operations, but as the report states, \u201chas been able to install a telephone switching device in Command Ridge, next to key transmission facilities of Australia\u2019s Federal Police.\u201d<\/p>\n
Adding to the picture, the report states that Chinese telecommunications company ZTE is a \u201cmain player\u201d behind AccLinks, and that \u201cZTE is funding the whole project and have already poured millions into the project.\u201d<\/p>\n
ZTE and another Chinese telecommunications company, Huawei, were named in a 2012 House Intelligence Committee report as security threats. It stated the companies may be providing Chinese intelligence services with access to telecommunications networks, and may be influenced by the CCP.<\/p>\n
The report states, \u201cAs many other countries show through their actions, the Committee believes the telecommunications sector plays a critical role in the safety and security of our nation, and is thus a target of foreign intelligence services.\u201d<\/p>\n
On its website, Acclinks states that it delivers products and services to the Pacific Islands in the areas of telecommunication, billing software, data communication, power utilities, and electronic equipment. It also states that the company is headquartered in Shenzhen City, Guangdong Province in China.<\/p>\n
In Nauru government documents, Zhang Huafeng is listed as Acclinks\u2019s CEO. However, the leaked report found that Zhang is not related to any such company in China.<\/p>\n
Zhang did not respond to a request for comment.<\/p>\n
Zhang is also listed as the controlling shareholder and CEO of Acclinks Nauru Ltd, Inc, co-owned by the Nauru government. While it can\u2019t be confirmed, the report states that the Chinese Acclinks may be trying to establish a joint venture with the Nauru government in telecommunications and electronics.<\/p>\n
There are also links between the Nauru company and a firm with a similar name that was listed in the Panama Papers database of exposed offshore entities around the world. Registered in the British Virgin Islands, Acclinks Communication Inc. counts Liang Liyong as a shareholder, who is also director of the Nauru company.<\/p>\n
The existence of multiple Acclinks subsidiaries suggests that it\u2019s \u201cvery probable\u201d the Chinese heads of the company are looking for ways to funnel cash out of mainland China and into offshore entities, the report concluded.<\/p>\n
An internet search also revealed that the Chinese name Zhang Huafeng is affiliated with several Chinese government posts: he is listed as director of Lintong District (in Xi\u2019an City, Shaanxi Province) Telecommunications Bureau, Major Customer Business Department; contact person for the state-owned China Telecom Co.\u2019s Nanhe branch in Hebei Province; and the Sichuan Province Mingshan County Telecommunications Company Party branch secretary. The report could not confirm whether the identity of the Zhang affiliated with Acclinks corresponded to these titles.<\/p>\n
<\/p>\n
The CCP has a known military and spy presence at landing stations for undersea cables, which some in the security community believe is being used to spy on data.<\/p>\n
According to a report from Project 2049 Institute, a security think tank, a Chinese military hacker unit, Unit 61398, \u201chas fiber optic connectivity with China Telecom\u2019s internet monitoring center\u201d located in the China Telecom Information Park in Pudong District, Shanghai.<\/p>\n
Unit 61398 is the Second Bureau of the CCP\u2019s signals intelligence agency, which is in the Third Department of the warfighting branch of its military, the General Staff Department.<\/p>\n
The U.S. Justice Department released wanted posters of Unit 61398\u2019s officers in May 2014. The five officers were charged with 31 crimes, which could amount to life sentences for each if they are arrested. China does not have an extradition treaty with the United States.<\/p>\n
Hassell noted that while spying on copper cables was common during the Cold War, spying on the large amount of data passing through today\u2019s networks is a new phenomena. He said, \u201cThe Chinese have the manpower and computer power to sort this data. A couple years ago you just couldn\u2019t do it because you didn\u2019t have sufficient computer technology.\u201d<\/p>\n
\u201cThe technology of sorting message traffic by keywords, and basically using the highly advanced conventional intelligence, you can derive a lot of patterns and information,\u201d he said.<\/p>\n
According to Project 2049 Institute, \u201cThe Second Bureau also manages a work station on Shanghai\u2019s Chongming Island,\u201d near the Chongming Submarine Cable Landing Station. It notes, \u201cThe landing station is reportedly the entry and exit point for 60 percent of all phone and internet traffic entering and leaving China.\u201d<\/p>\n
In addition, the institute states, the Second Bureau also oversees a work station near another major submarine cable landing station on Chongming Island, \u201cand probably a unit near the Nanhui [district in Shanghai] cable landing station.\u201d<\/p>\n
\u201cSecond Bureau elements with direct access to fiber optic cable landing stations could buffer communications traffic entering and leaving China,\u201d it states, adding that as gatekeepers for such information, the Second Bureau may have obtained \u201clarge volumes of data exfiltrated by other cyber espionage groups operating from throughout China.\u201d<\/p>\n
Other submarine cable landing stations have a similar CCP military presence. Project 2049 Institute notes that the Fourth Bureau, in charge of the CCP\u2019s electronics intelligence operations, are present in many of the same areas; and members of the Chinese military\u2019s technical reconnaissance community \u201cmay have access to similar landing stations located in the eastern coastal city Qingdao [eastern coastal city in Shandong Province], Shantou [southeastern coastal city in Guangdong Province], Hong Kong, and more recently in Fuzhou [eastern coastal city in Fujian Province].\u201d<\/p>\n
According to Daniel Wagner, founder of risk management company Country Risk Solutions, \u201cthis should not be a surprise to anyone,\u201d given the CCP\u2019s \u201cpenchant for industrial espionage on an industrial scale.\u201d<\/p>\n
\u201cChina is leading in industrial espionage, so could we imagine it would not be the case they\u2019re doing something like this to ramp up their efforts and remain on the cutting edge,\u201d he said.<\/p>\n